Stock Quotes in this Article: BPAX, CALI, CBLI, HK, JRCC

WINDERMERE, Fla. (Stockpickr) -- There isn't a day that goes by on Wall Street when certain stocks trading for $10 a share or less don't experience massive spikes higher. Traders savvy enough to follow the low-priced names and trade them with discipline and sound risk management are banking ridiculous coin on a regular basis.

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Just take a look at some of the hot movers in the under-$10 complex from Wednesday, including Net1 UEPS Technologies (UEPS), which skyrocketed by 25%; Cyclacel Pharmaceuticals (CYCC), which soared by 19%; Life Partners (LPHI), which trended up by 15.9%; and Photronics (PLAB), which surged by 11.2%. You don't even have to catch the entire move in lower-priced stocks such as these to make outsized returns when trading.

One low-priced stock that recently ripped to the upside was Caesars Entertainment (CZR), which I highlighted in Nov. 15's “7 Stocks Under $10 Moving Higher” at around $4.95 a share. I mentioned that CZR was bouncing strongly to the upside with above-average volume. That move was coming after CZR had downtrended badly for six months and entered oversold territory. I highlighted how CZR was getting strong volume and quickly moving within range of triggering a breakout trade above some near-term overhead resistance at $5.28 a share.

Guess what happened? Shares of CZR never looked back and the stock went on to trigger that breakout that I flagged in the piece. Shares of CZR went on to soar to its recent high of $6.89 a share, which is a solid gain in a very short timeframe. This equity still looks technically bullish as shares are now setting up to trigger another breakout trade once it takes out some near-term overhead resistance levels at $7.06 to $6.89 a share. If that breakout triggers soon, then CZ will set up to re-test or possibly take out its next major overhead resistance levels at $7.79 to $8 a share.

Low-priced stocks are something that I tweet about on a regular basis. I frequently flag high-probability setups, breakout candidates and low-priced stocks that are acting technically bullish. I like to hunt for low-priced stocks that are showing bullish price and volume trends, since that increases the probability of those stocks heading higher. These setups often produce monster moves higher in very short time frames.

I'm not as eager to recommend investing long-term in stocks that trade less than $10 a share because these names can be very speculative, and the odds for picking the long-term winners aren't great. But I definitely love to trade stocks that are priced below $10. I like to view them as a trading vehicle with lots of volatility and lots of upside when the trade is timed right.

When I trade under-$10 names, I do it almost entirely based off of the charts and technical analysis. I also like to find under-$10 names with a catalyst, but that's secondary to the chart and volume patterns.

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With that in mind, here's a look at several under-$10 stocks that look poised to potentially trade higher from current levels.

Halcon Resources

One under-$10 stock that's trending very close to triggering a near-term breakout trade is Halcon Resources (HK), which is engaged in the acquisition, development, exploitation, exploration and production of oil and natural gas properties. This stock has been destroyed by the bears so far in 2012, with shares off by a whopping 83%.

If you take a look at the chart for HK, you'll notice that this stock has been uptrending strongly for the last month, with shares moving from $5.26 to $6.60 a share. During that uptrend, shares of HK have been making higher lows and higher highs, which is bullish technical price action. That move has now pushed HK within range of triggering a near-term breakout trade.

Traders should now look for long-biased trades in HK once it manages to break out above some near-term overhead resistance levels at $6.44 to its 50-day moving average of $6.54 a share with high volume. Look for a sustained move or close above those levels with volume that registers near or above its three-month average action of 3,918,020 shares. If that breakout triggers soon, then HK will set up to re-test or possibly take out its next significant overhead resistance levels at $7.37 to $7.77 a share. Any high-volume move above those levels will then put $8.49 to $8.59 a share into focus for shares of HK.

Traders can look to buy HK off weakness as long as it's trending above some near-term support at $6.03 to $5.80 a share and then simply use a stop just below those level. One could also buy off strength once HK clears $6.44 to $6.54 a share with volume and then use a stop that sits right below $6.03 a share.

Biosante Pharmaceuticals

Another under-$10 stock that's setting up to trigger a major breakout trade is Biosante Pharmaceuticals (BPAX), which is s a specialty pharmaceutical company focused on developing products for female sexual health and oncology. This stock has been acting weak during the last six months, with shares off by 45%.

If you take a look at the chart for Biosante Pharmaceuticals, you'll notice that this stock has been uptrending very strong for the last month and change, with shares soaring from a low of $1.08 to its recent high of $1.51 a share. During that uptrend, shares of BPAX have been consistently making higher lows and higher highs, which is bullish technical price action. That move has now pushed shares of BPAX within range of triggering a major breakout trade.

Market players should now look for long-biased trades in BPAX once it breaks out above some near-term overhead resistance levels at $1.51 to $1.52 a share with high volume. Look for a sustained move or close above those levels with volume that hits near or above its three-month average action 777,294 shares. If that breakout triggers soon, then BPAX will set up to re-test or possibly take out its next significant overhead resistance levels at $1.97 to $2.20 a share, or possibly even its 200-day moving average at $2.39 a share.

At last check, shares of BPAX have just started to move above those breakout levels today and volume is tracking in strong. The stock has hit an intraday high of $1.58, so those breakout levels are being challenged as I write this.

Traders can look to buy BPAX off any weakness as long as it's trending above its 50-day moving average of $1.39 a share. One can also buy off strength as long as BPAX is trending above those breakout levels with strong upside volume flows.

Cleveland BioLabs

One under-$10 name that looks ready to trend significantly higher is Cleveland BioLabs (CBLI), which is focused on developing biodefense, tissue protection and cancer treatment drugs based on the concept of modulation of cell death for therapeutic benefit. This stock has been trending lower so far in 2012, with shares off by 26%.

If you take a look at the chart for Cleveland BioLabs, you'll notice that this stock was downtrending badly from October to late November with shares falling from $2.95 to $1.23 a share. During that downtrend, shares of CBLI were mostly making lower highs and lower lows, which is bearish technical price action. That said, shares of CBLI have started to rebound off that $1.23 low and push into near-term breakout territory.

Traders should now look for long-biased trades in CBLI once it manages to break out above some near-term overhead resistance levels at $1.48 to $1.60 a share with high volume. Look for a sustained move or close above those levels with volume that registers near or above its three-month average action of 244,705 shares. If that breakout triggers soon, then CBLI will set up to re-test or possibly take out its next major overhead resistance levels at $1.80 to $2 a share. Any high-volume move above $2 could send CBLI exploding higher into its previous gap down zone from October that started at around $2.70 a share.

At last check, shares of CBLI have hit an intraday high of $1.58 and volume is tracking in decent. Some of that upside move today was due to Oppenheimer, which issued an outperform rating on the stock.

Traders can look to buy CBLI off any weakness and simply use a stop that sits right around some key near-term support at $1.28 a share. One could also buy CBLI off strength once it takes out those breakout levels with high volume and then simply use a stop that sits just below $1.35 a share.

China Auto Logistics

Another under-$10 name that's trading very close to triggering a major breakout trade is China Auto Logistics (CALI), which is engaged in providing automobile sales and trading service and a Web-based automobile sales and trading information platform to its customers. This stock has been on fire during the last six months, with shares up a whopping 99%.

If you take a look at the chart for China Auto Logistics, you'll see that this stock exploded higher in early November and ran from $1.50 to $7.48 a share with monster upside volume. Following that move, shares of CALI quickly pulled back to its recent low of $3.76 a share as traders locked in quick profits. Now shares of CALI have started to uptrend again and move within range of triggering a major breakout trade.

Market players should now look for long-biased trades in CALI once it manages to take out some near-term overhead resistance levels at $5.10 to $5.43 a share with high volume. Look for a sustained move or close above those levels with volume that hits near or above its three-month average action of 200,142 shares. If that breakout triggers soon, then CALI will set up to re-test or possibly take out its next significant overhead resistance levels at $7 to $7.48 a share.

Traders can look to buy CALI off any weakness and then simply use a stop that sits right around some key near-term support at $4.35 to $4 a share. One could also buy CALI off strength once it takes out those breakout levels with volume and then simply use a stop just below $5 to $4.50 a share.

James River Coal

One final under-$10 name that's trending very close to triggering a near-term breakout trade is James River Coal (JRCC), which is engaged in mining, processing and selling thermal and metallurgical coal through eight active mining complexes located throughout eastern Kentucky, southern West Virginia and southern Indiana. This stock has been hit hard by the bears so far in 2012, with shares off by 43%.

If you take a look at the chart for James River Coal, you'll notice that this stock has been uptrending strong for the last month, with shares soaring from a low of $2.04 to its recent high of $3.97 a share. During that uptrend, shares of JRCC have been making mostly higher lows and higher highs, which is bullish technical price action. That move has also been accompanied by some large upside volume days. That action has started to push shares of JRCC within range of triggering a near-term breakout trade.

Traders should now look for long-biased trades in JRCC once it breaks out above some near-term overhead resistance levels at its 200-day at $3.59 and then above some more overhead resistance at $3.97 a share with high volume. Look for a sustained move or close above those levels with volume that hits close to or above its three-month average action of 2,930,360 shares. If that breakout triggers soon, then JRCC will set up to re-test or possibly take out its next major overhead resistance levels at $4.75 to $5 a share. Any high-volume move above those levels will then put $5.50 to $5.89 a share into focus for shares of JRCC.

Traders should keep in mind that any move above $4 a share will also push JRCC into its previous gap down zone from November that started at around $4.75 a share.

Traders can look to buy JRCC off any weakness and simply use a stop that sits right around some key near-term support at $2.88 a share. One could also buy JRCC off strength once it clears those breakout levels with volume and then simply use a stop that sits just below its 50-day moving average of $3.51 a share.

To see more hot under-$10 equities, check out the Stocks Under $10 Setting Up to Explode portfolio on Stockpickr.

-- Written by Roberto Pedone in Winderemere, Fla.

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At the time of publication, author had no positions in stocks mentioned.

Roberto Pedone, based out of Windermere, Fla., is an independent trader who focuses on technical analysis for small- and large-cap stocks, options, futures, commodities and currencies. Roberto studied international business at the Milwaukee School of Engineering, and he spent a year overseas studying business in Lubeck, Germany. His work has appeared on financial outlets including CNBC.com and Forbes.com. You can follow Pedone on Twitter at www.twitter.com/zerosum24 or @zerosum24.